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Unions challenge penalty rate cut in Federal Court

Unions representing hospitality, retail and pharmacy workers have challenged the Fair Work Commission's decision to cut Sunday penalty rates in the Federal Court.

A full court of five judges heard the appeal over three days from September 26 against the Fair Work Commission’s decision that cut Sunday penalty rates for workers in the fast food, hospitality, retail and pharmacy sectors from July 1.

Hospitality union United Voice and the Shop, Distributive and Allied Employees' Association (SDA) launched separate Federal Court challenges to keep workers' penalty rates the same for Sundays and public holidays. In July, Justice Mordecai Bromberg decided both cases would be heard together.

Employer and business groups including the Australian Industry Group, the Australian Hotels Association, the Australian Retailers Association and the NSW Business Chamber argued in favour of the cuts.

The first cut to penalty rates was 5%, with more cuts in 2018 and 2019 for fast food and hospitality workers. Retail and pharmacy workers will have cuts to their rates phased in until 2020.

“We are fighting to stop these cuts, because they are a pay cut that workers can’t afford and don’t deserve,” she said.

She said their legal argument was that “the Fair Work Commission failed to consider the relative living standards and needs of the low-paid as they are required to under the act” and “that penalty rates form an important part of the safety net for workers in the hospitality industry”.

“In handing down the decision, the Fair Work Commission stated that the cuts ‘would inevitably cause some hardship to the employees affected’,” she said. “But they have cut these workers’ pay packets regardless.

“We are appealing because we believe the system is broken — a system that is there to protect relative living standards, not to lower them.”

The ACTU has backed United Voice’s case. ACTU president Ged Kearney said if the law did not protect the lowest paid workers, the law was broken.

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